“Clearview maintained its focus on paying down bank debt during 2021 to further improve its financial position”, commented Tony Angelidis, Clearview’s CEO. “Much higher commodity prices will allow us to further reduce our bank debt during 2022 while undertaking a slightly higher capital program pursuing low-risk, organic opportunities to offset production declines”, added Mr. Angelidis.
2021 HIGHLIGHTS
- Increased production 3% to average 2,119 barrels of oil equivalent per day (“boe/d”) for the year ended December 31, 2021, compared to the prior year, due to a successful reactivation and optimization program;
- Realized sales price for oil increased 81% over the comparative year, to $75.18 per barrel and the realized sales price for natural gas increased 73% over the comparative year to $3.90 per mcf;
- Generated adjusted funds flow(1) of $5.6 million in the year ended December 31, 2021 and cash provided by operating activities of $6.1 million as compared to $2.5 million and $1.8 million, respectively, in the comparative year; and
- Reduced the Company’s net debt(1) to $10.2 million, utilizing adjusted funds flow in excess of capital expenditures(2) and decommissioning expenditures, by repaying bank debt of $3.5 million in 2021.
Notes |
|
(1) |
Each of “adjusted funds flow” and “net debt” are capital management measures that do not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release. |
(2) |
Non-IFRS measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. See “Non-IFRS Measures” contained within this press release. |
FINANCIAL and OPERATIONAL RESULTS
Production for the year ended December 31, 2021 was up 3% to 2,119 boe/d versus the comparative year of 2020 at 2,055 boe/d. The increase was due to a successful and capital efficient reactivation and optimization program completed during the year and redirecting a portion of the Company’s natural gas production to a different natural gas processing facility resulting in an increase to the natural gas liquids yield. Natural gas liquids production increased 18% compared to the prior year.
Adjusted funds flow for the year ended December 31, 2021 was $5.6 million, an increase of 124%, primarily due to an 88% increase in oil and natural gas sales as a result of higher realized sales prices for all the Company’s production. Capital expenditures for 2021 were $2.1 million and decommissioning expenditures funded by Clearview were $0.3 million which enabled the Company to further reduce its net debt. Clearview reduced its outstanding bank debt by $3.5 million and increased its working capital deficit by $0.5 million for a net debt reduction of $3.0 million. At December 31, 2021, the Company had net debt of $10.2 million, consisting of bank debt with ATB Financial of $8.8 million, of which $5.0 million is guaranteed by Export Development of Canada, convertible debentures of $1.2 million and a working capital deficit of $0.2 million.
FINANCIAL and OPERATING HIGHLIGHTS
Financial
Three months ended |
Year ended |
|||||
Dec. 31 2021 |
Dec. 31 2020 |
% Change |
Dec. 31 2021 |
Dec. 31 2020 |
% Change |
|
Oil and natural gas sales |
8,918 |
4,870 |
83 |
30,364 |
16,133 |
88 |
Adjusted funds flow (1) |
1,797 |
957 |
88 |
5,573 |
2,487 |
124 |
Per share – basic (2) |
0.15 |
0.08 |
88 |
0.48 |
0.21 |
129 |
Per share – diluted (2) |
0.14 |
0.08 |
75 |
0.44 |
0.21 |
110 |
Cash provided by operating activities |
2,636 |
55 |
4,693 |
6,130 |
1,783 |
244 |
Per share – basic |
0.23 |
– |
100 |
0.53 |
0.15 |
253 |
Per share – diluted |
0.21 |
– |
100 |
0.48 |
0.15 |
220 |
Net earnings (loss) |
10,512 |
16,891 |
(38) |
5,212 |
(10,842) |
(148) |
Per share – basic |
0.90 |
1.45 |
(38) |
0.45 |
(0.93) |
(148) |
Per share – diluted |
0.82 |
1.45 |
(43) |
0.42 |
(0.93) |
(145) |
Net debt (1) |
10,193 |
13,235 |
||||
Average shares outstanding |
11,671 |
11,671 |
– |
11,671 |
11,671 |
– |
(1) |
Capital management measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release. |
(2) |
Supplementary financial measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release. |
Production
Three months ended |
Year ended |
|||||
Dec. 31 2021 |
Dec. 31 2020 |
% Change |
Dec. 31 2021 |
Dec. 31 2020 |
% Change |
|
Oil – bbl/d |
433 |
487 |
(11) |
462 |
480 |
(4) |
Natural gas liquids – bbl/d |
487 |
345 |
41 |
464 |
393 |
18 |
Total liquids – bbl/d |
920 |
832 |
11 |
926 |
873 |
6 |
Natural gas – mcf/d |
6,755 |
7,443 |
(9) |
7,158 |
7,091 |
1 |
Total – boe/d |
2,045 |
2,072 |
(1) |
2,119 |
2,055 |
3 |
Realized sales prices (1)
Three months ended |
Year ended |
|||||
Dec. 31 2021 |
Dec. 31 2020 |
% Change |
Dec. 31 2021 |
Dec. 31 2020 |
% Change |
|
Oil – $/bbl |
87.55 |
45.41 |
93 |
75.18 |
41.50 |
81 |
NGLs – $/bbl |
52.61 |
28.20 |
87 |
44.23 |
20.72 |
113 |
Natural gas – $/mcf |
4.95 |
2.84 |
74 |
3.90 |
2.26 |
73 |
Total – $/boe |
47.39 |
25.55 |
85 |
39.26 |
21.45 |
83 |
(1) Supplementary financial measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures of other entities. See “Non-IFRS Measures” contained within this press release. |
Netback analysis (1)
Three months ended |
Year ended |
|||||
Barrel of oil equivalent ($/boe) |
Dec. 31 2021 |
Dec. 31 2020 |
% Positive |
Dec. 31 2021 |
Dec. 31 2020 |
% Positive |
Realized sales price |
47.39 |
25.55 |
85 |
39.26 |
21.45 |
83 |
Royalties |
(8.79) |
(0.51) |
(1,624) |
(5.52) |
(1.18) |
(368) |
Processing income |
0.68 |
0.62 |
10 |
0.61 |
0.69 |
(12) |
Transportation |
(1.55) |
(1.56) |
1 |
(1.69) |
(1.57) |
(8) |
Operating |
(16.83) |
(12.21) |
(38) |
(15.80) |
(13.44) |
(18) |
Operating netback (2) |
20.90 |
11.89 |
76 |
16.86 |
5.95 |
183 |
Realized gain (loss) – financial instruments |
(8.44) |
(0.41) |
(1,959) |
(5.85) |
1.59 |
(468) |
General and administrative |
(3.10) |
(2.31) |
(34) |
(2.84) |
(2.14) |
(33) |
Other (costs) income |
1.75 |
(1.07) |
264 |
0.51 |
(0.27) |
289 |
Cash finance costs (2) |
(1.57) |
(3.06) |
49 |
(1.48) |
(1.82) |
19 |
Corporate netback (2) |
9.54 |
5.04 |
89 |
7.20 |
3.31 |
118 |
(1) |
% Positive (Negative) is expressed as being positive (better performance in the category) or negative (reduced performance in the category) in relation to operating netback, corporate netback and net earnings. |
(2) |
Non-IFRS measure or ratio that does not have any standardized meaning as prescribed by International Financial Reporting Standards and therefore may not be comparable with the calculations of similar measures or ratios of other entities. See “Non-IFRS Measures” contained within this press release. |
OPERATIONS
Clearview finished 2021 on a strong operational note. The Company’s Phase 1 and 2 optimization and reactivation capital programs in 2021 met the objective of significantly offsetting corporate declines. The Company’s 2021 annual production averaged 2,119 barrels of oil equivalent per day, representing a 3% increase over 2020 despite minimal capital spending. In January 2022, Clearview initiated its 2022 optimization program. This program is estimated to consist of approximately $2.3 million of well optimization and reactivation activity. At current commodity prices, these capital projects are expected to achieve payback in less than six months once brought on-stream.
The Company continued abandonment and reclamation activities through to the end of 2021. During the year, the Company incurred $0.9 million in abandoning 29 gross (13.2 net) wells, represented by $0.3 million funded from cash provided by operating activities and $0.6 million from eligible government grants from the Site Rehabilitation Program of the Government of Alberta. Spending for 2022 has been budgeted for approximately $0.8 million. The ultimate level of decommissioning expenditures will depend on the amount of non-operated spending activities conducted by Clearview’s partners while Clearview executes its own operated abandonment and reclamation program commensurate with Alberta Energy Regulator closure targets.
OUTLOOK
Consistent with Clearview’s strategy to seek a liquidity option for its shareholders, management and the Board will continue to improve the corporation’s financial position by prioritizing debt repayment to enhance shareholder value.
As part of the liquidity strategy, the Company has initiated a 2022 optimization and reactivation program, leveraging on the successful results of the 2021 programs. Maintaining a strong producing asset base and minimizing production declines, as the Company retires its debt, is expected to support Clearview’s objective to provide liquidity to its shareholders. Initial results of the optimization program for 2022 will be realized in the coming months.
Clearview’s December 31, 2021 year-end audited financial statements and management’s discussion and analysis are available on the Company’s website at www.clearviewres.com and SEDAR at www.SEDAR.com.